Action Plan of Shanghai Municipality for Supporting Mergers and Acquisitions of Listed Companies (2025-2027)

In line with the guiding principles from the Third Plenary Session of the 20th Central Committee of the Communist Party of China (CPC), and pursuant to the Several Opinions of the State Council on Strengthening Regulation, Preventing Risks, and Promoting the High-Quality Development of the Capital Market, and the Opinions of China Securities Regulatory Commission on Furthering Market-Oriented Reforms for Mergers and Acquisitions of Listed Companies, this plan has been formulated to advance the reform objectives of the capital market and amplify the decisive role of the market in resource allocation while enabling the government to better fulfill its function, so as to improve resource allocation efficiency, accelerate strategic industrial upgrades, and strengthen efforts to promote the building of Shanghai into an international economic, financial, trade, shipping and scientific and technological innovation center.

I. Strategic Objectives

By 2027, efforts will be made to have achieved the following milestones:

• Facilitate a number of landmark M&A transactions in key industries.
• Cultivate approximately 10 internationally competitive listed companies in strategic sectors such as integrated circuits, biopharmaceuticals, and new materials.
• Achieve an M&A transaction volume of 300 billion yuan, activate total assets exceeding 2 trillion yuan, and consolidate 3–5 professional M&A fund managers with significant influence within their respective industries.
• Substantially enhance the M&A service capabilities of intermediary institutions and ensure the effective functioning of M&A service platforms.
• Markedly strengthen collaboration between industry associations and capital markets, between municipal and district people's governments, and between governments and enterprises, while establishing an integrated and effective policy framework to support M&A activities.

The overarching goal is to position Shanghai as a pioneer and exemplar in the field of M&A of listed companies, with a robust industrial ecosystem, a mature M&A environment, and a sustainable multi-stakeholder collaboration mechanism. This will contribute to high-quality economic development.

II. Strengthening and Optimizing Industrial Chains with a Focus on New Quality Productive Forces

Efforts will be made to promote resource integration among high-quality listed companies and industrial groups across industrial chains. Support will be provided to listed companies for the acquisition of strategically important assets, including underperforming yet high-potential assets, to strengthen and optimize industrial chains and enhance key technological capabilities.

Special emphasis will be placed on critical strategic sectors such as integrated circuits, biopharmaceuticals, and artificial intelligence. Efforts will focus on identifying and prioritizing leading listed companies within these sectors.

The following units will bear the responsibility for the implementation of these initiatives: the Municipal Commission of Economy and Informatization, the Municipal Development and Reform Commission, the Municipal State-Owned Assets Supervision and Administration Commission (SASAC), the Municipal Commission of Science and Technology, the Financial Commission Office of the CPC Municipal Committee, and all district people's governments.

III. Driving the Transformation and Upgrading of Traditional Industries

Support will be given to listed companies in traditional sectors — including modern and specialized service industries such as finance and logistics — in pursuing intra-industry and vertical mergers, acquisitions, and consolidations. These efforts are aimed at enhancing industrial concentration.

Moreover, support will be provided for cross-sector mergers and acquisitions that drive industrial upgrading and seek the second growth curve. The integration of high-quality assets will be encouraged to elevate the investment value of listed companies.

The pivotal role of state-owned listed enterprises will be leveraged to strengthen the core functions of key industries, enabling Shanghai to make strategic, forward-looking investments aimed at accelerating the development of emerging industries. Additionally, efforts will be directed toward promoting high-quality mergers and acquisitions to facilitate the modernization and transformation of traditional industries.

The following units will bear the responsibility for the implementation of these initiatives: the Municipal Commission of Economy and Informatization, the Municipal Development and Reform Commission, the Municipal SASAC, the Municipal Commission of Science and Technology, the Municipal Commission of Commerce, the Financial Commission Office of the CPC Municipal Committee, and all district people’s governments.

IV. Establishing a Mechanism for Identifying and Reserving M&A Targets

A comprehensive catalog of prospective key M&A target companies will be curated to align with the developmental imperatives of enterprises and the strategic industrial blueprint of Shanghai. This endeavor will prioritize three pioneering industries — integrated circuits, biopharmaceuticals, and artificial intelligence — while extending its focus to other critical industrial chains, including next-generation electronic information, intelligent and connected vehicles, new energy vehicles, high-end equipment, new energy and green low-carbon technologies, advanced materials, fashion consumer goods, and software and information services. Efforts will be made to facilitate meaningful connections between high-quality listed companies and these identified target enterprises.

The following units will bear the responsibility for the implementation of these initiatives: the Municipal Commission of Economy and Informatization, the Municipal Development and Reform Commission, the Municipal SASAC, the Municipal Commission of Science and Technology, the Financial Commission Office of the CPC Municipal Committee, and all district people’s governments.

V. Strengthening M&A Resource Integration and Post-Merger Empowerment

Specialized investment promotion teams will be mobilized to establish a seamless, closed-loop operational system. This system will ensure comprehensive, end-to-end tracking and holistic services for enterprises targeted for mergers and acquisitions. Following the completion of acquisitions, dedicated support will be provided to facilitate the integration of resources.

For major industrial projects that successfully settle in Shanghai as a result of mergers, the relevant departments of the municipal and district people's governments will intensify their efforts to deliver robust, targeted support. This includes enhancing services in critical areas such as land allocation, energy consumption, talent recruitment, research and development, and financial assistance. Priority attention will be given to these projects to ensure their smooth operation and sustainable development.

The following units will bear the responsibility for the implementation of these initiatives: the Municipal Commission of Economy and Informatization, the Municipal Bureau of Planning and Natural Resources, the Municipal Development and Reform Commission, the Municipal Talent Service Bureau, the Municipal Commission of Science and Technology, the Financial Commission Office of the CPC Municipal Committee, and all district people's governments.

VI. Accelerating the Development and Aggregation of M&A Funds

Efforts will be intensified to attract professional, market-oriented M&A fund managers, fostering the aggregation of market-driven M&A funds. Eligible funds will be granted access to an expedited approval process for the establishment of equity investment vehicles. The 10-billion-yuan Integrated Circuit Design Industry M&A Fund will be fully utilized to its potential, while a new 10-billion-yuan Biopharmaceutical Industry M&A Fund will be established. Government investment funds may participate in M&A initiatives through mechanisms such as common equity, preferred shares, or convertible bonds, offering reasonable concessions. Enterprises identified as "lead chain" entities within critical industrial chain segments and engaging in mergers and acquisitions through corporate venture capital (CVC) will likewise benefit from accelerated approval processes for CVC funds.

The following units will bear the responsibility for the implementation of these initiatives: the Municipal SASAC, the Municipal Commission of Economy and Informatization, the Municipal Commission of Science and Technology, the Municipal Development and Reform Commission, the Financial Commission Office of the CPC Municipal Committee, and Shanghai Securities Regulatory Bureau.

VII. Enhancing Service Capabilities of Intermediary Institutions

The consolidation of securities companies will be accelerated to support the development of world-class investment banks. Investment banks will be encouraged to establish comprehensive M&A service teams that integrate industrial research, investment, investment banking, investment research, financing, legal services, and evaluation and auditing. These teams will provide full lifecycle services to M&A stakeholders. Regular training sessions will be conducted for intermediary institutions — such as investment banks, accounting firms, law firms, and asset evaluation agencies — to deepen their understanding of industries and enhance their professional capabilities in providing M&A-related services.

The following units will bear the responsibility for the implementation of these initiatives: Shanghai Securities Regulatory Bureau, the Financial Commission Office of the CPC Municipal Committee, the Municipal SASAC, the Municipal Bureau of Justice, the Municipal Bureau of Finance, and Shanghai Stock Exchange.

VIII. Building a Comprehensive M&A Service Platform

Collaboration between the government and the market will be strengthened to establish an M&A resource aggregation zone characterized by professional management capabilities, robust policy support, and high resource integration. A one-stop public M&A service platform will be developed and a third-party market-oriented M&A service platform to integrate resources such as banks, securities firms, funds, and asset evaluation agencies. These platforms will provide key services including demand identification, transaction matchmaking, and asset transfers. Regular M&A-focused events — such as salons, training sessions, roadshow promotions, and financing matchmaking — will be organized to support stakeholders. Additionally, policy interpretation efforts will be enhanced, and regular communication mechanisms with listed companies, intermediary institutions, and other business entities will be established to ensure the successful implementation of exemplary cases.

The following units will bear the responsibility for the implementation of these initiatives: the relevant district people’s governments, Shanghai Exchange Group, the Financial Commission Office of the CPC Municipal Committee, Shanghai Securities Regulatory Bureau, the Municipal SASAC, Shanghai Stock Exchange, and the relevant industry associations.

IX. Strengthening Support Through Comprehensive and Coordinated Policies

Newly established professional M&A fund managers will qualify for targeted incentives to bolster their operations. The performance evaluation mechanisms for government-funded investment funds will be optimized. The cross-border M&A project filing mechanism for outbound direct investment (ODI) in key sectors will be leveraged to facilitate the acquisition of high-quality overseas assets by listed companies.

Financial institutions will be encouraged to develop and offer a diverse range of financial products, including loans, insurance, and bonds, to support M&A transactions and subsequent operations. Pilot programs for innovative equity-based M&A loans tailored to technology enterprises in the Chinese mainland will be explored. The coordinated use of financial instruments such as free trade accounts and cross-border capital pools will be promoted. Additionally, pilot programs for the cross-border transfer of syndicated loan shares, improved foreign debt registration management, and streamlined cross-border guarantee processes will be implemented to address the financing needs of cross-border M&A activities effectively.

The following units will bear the responsibility for the implementation of these initiatives: the Municipal Development and Reform Commission, the Municipal Bureau of Finance, the Municipal Commission of Commerce, the Financial Commission Office of the CPC Municipal Committee, Shanghai Financial Regulatory Bureau, Shanghai Branch of the State Administration of Foreign Exchange, and all district people's governments.

X. Enhancing Efficiency in M&A Services and Regulatory Inclusiveness

Relevant departments of the municipal and district people's governments will establish expedited service channels for key industrial M&A projects, ensuring efficient and convenient services in areas such as project approvals, environmental assessments, and labor-related approvals.

Greater policy inclusiveness will be extended to assets, including underperforming yet high-potential assets, to strengthen and optimize industrial chains and enhance key technological capabilities.

The management systems for state-owned asset evaluations will be optimized, and the approval processes for state-owned asset M&A projects will be made more efficient. Performance evaluation and accountability mechanisms for state-owned equity investment funds will be refined, with a focus on overall fund performance and long-term returns. Under appropriate due diligence and accountability frameworks, investment projects in marginally profitable or loss-making states will be permitted to exit via M&A channels without incurring undue liability.

The following units will bear the responsibility for the implementation of these initiatives: the Municipal SASAC and other relevant authorities, as well as the district people's governments concerned.

XI. Strengthening Talent and Legal Safeguards

Mechanisms for talent evaluation and incentive structures will be enhanced. Individuals demonstrating exceptional performance on key M&A projects will be supported in applying for talent programs, such as the Shanghai Oriental Talent Plan.

The role of the Shanghai Financial Court will be leveraged to strengthen specialized mechanisms for resolving financial disputes. The adjudication of investment, financing, and securities disputes related to the M&A of listed companies will be strengthened. Enterprises will be encouraged to carry out M&A transactions in accordance with law, thereby fostering a transparent, fair, and dynamic market environment.

The following units will bear the responsibility for the implementation of these initiatives: the Financial Commission Office of the CPC Municipal Committee, the Municipal Talent Service Bureau, the Municipal Commission of Education, the Municipal Bureau of Human Resources and Social Security, Shanghai Financial Court, Shanghai Securities Regulatory Bureau, Shanghai Stock Exchange, and relevant industry associations.

XII. Enhancing the Prevention and Mitigation of Various Risks

During M&A processes, robust measures will be undertaken to prevent illegal and non-compliant activities including financial fraud, fund misappropriation, insider trading, and market manipulation. Communication and guidance between regulatory authorities and market participants will be enhanced to safeguard the rights and interests of small and medium-sized investors.

Comprehensive due diligence, including financial and legal assessments, will be mandated to ensure sound transaction terms and mitigate potential commercial risks in M&A activities. Supervision and standardization of asset pricing and transaction processes will be strengthened to prevent the loss of state-owned assets. Market participants will be encouraged to conduct cross-border M&A activities in a compliant manner.

The following units will bear the responsibility for the implementation of these initiatives: Shanghai Securities Regulatory Bureau, the Municipal SASAC, the Municipal Development and Reform Commission, the Municipal Commission of Commerce, and Shanghai Stock Exchange.

The Financial Commission Office of the CPC Municipal Committee, the Municipal Development and Reform Commission, the Municipal Commission of Economy and Informatization, the Municipal Commission of Science and Technology, the Municipal Commission of Commerce, the Municipal State-owned Assets Supervision and Administration Commission, the Municipal Bureau of Finance, the Municipal Administration for Market Regulation, the Municipal Tax Service, Shanghai Financial Regulatory Bureau, Shanghai Securities Regulatory Bureau, relevant district people's governments, Shanghai Stock Exchange, and other pertinent units will jointly study and promote M&A activities, policy support, and ecosystem development, among others, as well as conduct regular consultations and monitoring of the work progress.

These units will also incorporate major M&A activities in critical sectors into the capital market collaboration mechanism to support the building of Shanghai into an international economic, financial, trade, shipping and scientific and technological innovation center.